MacArthur Foundation exec built her career from a mix of public, private experience and dashes of chance, risk

Kathy BergenTribune staff reporter

When Robert Gallucci arrived in Chicago to take the reins at the MacArthur Foundation in mid-2009, he found himself besieged by new "friends."

"They had great ideas on how the foundation could spend its money," he said.

The onetime diplomat and Georgetown University dean met with senior staff and acknowledged: "I'm having trouble sorting out these (requests). Some ideas seem so worthy. How do you decide to do this and not that?"

Clarity came in the form of incisive remarks by Julia Stasch, vice president of U.S. programs for the international foundation, which is based in Chicago and is the city's largest.

"She said, fundamentally, 'We don't do soup kitchens.' And that stuck with me," Gallucci said. "It was not clear what she meant at first. You can't miss with a soup kitchen."

But her bedrock message, he said, was that the foundation, with its considerable brain power, should strive for institutional or systemic changes that can help multitudes of people over the long haul.

The moment was quintessential Julia Stasch. A behind-the-scenes visionary and politically savvy strategist, she has an ability to distill complex research and cut to the chase that has served her well as she endeavors to help change the face of business, civic and everyday life in Chicago and the nation.

A rebellious child of the '60s who took 10 years to complete her first college degree, Stasch played a critical role in opening up high-profile construction projects to minority- and women-owned contractors while in the private sector.

Later, at City Hall, she was a key figure in launching the replacement of Chicago's notoriously derelict high-rise public housing projects with mixed-income developments.

Now in the philanthropic world, she is focused on redesigning faltering public education systems for the digital age; examining the U.S. criminal justice system, which imprisons people at a higher rate than any other developed nation; and brainstorming about how Chicago's stalled economy can regain momentum.

"In metro areas around the country, there are a few people who connect the dots between civic, philanthropic, business, government, labor and environmental organizations -- all these constituencies that make up the leadership class," said Bruce Katz, director of the Brookings Institution's Metropolitan Policy Program. "Julia is clearly one of those people in Chicago."

How she arrived at that pivotal position, and how she continues to use it to help set the civic agenda, is a remarkable story with multiple lessons. It is a testament to making the most of small windows of opportunity, to being willing to leap at new pathways and to taking risks to produce lasting change, even when it provokes the powers-that-be.

Jumping at a chance opening

After dropping out of Antioch College in Ohio, working as a Vista volunteer on an Indian reservation and experiencing the counter-culture life in San Francisco, Stasch, who grew up in Hinsdale, migrated back to Chicago in the early 1970s. She was working as a secretary in a medical office when she encountered a patient named Richard Stein, who eventually became one of the city's most prominent real estate developers.

"I thought he was the most arrogant man," Stasch recalls. "He would come in -- I guess this is the worst thing a medical secretary can say -- he would come in without an appointment."

Stasch, known as Julie to her friends, laughs at the memory, spinning the tale from her gracious corner office in the historic Marquette Building on South Dearborn Street.

The thread picks up a couple of years later, in 1977, when she had graduated from Loyola University with a degree in American history and was teaching high school on the South Side. She bumped into Stein on the street. He had just fired his secretary and offered her the job, for $18,000, a considerable sum at the time and substantially more than she was earning as a teacher.

"I have a history of jumping at things that let me change my life on a dime," said Stasch, 65.

She started as a secretary with Stein & Co. when the firm had four employees, but she would exit about 20 years later as president and chief operating officer of a company with a payroll of 220. The firm ultimately was sold to Mesirow Financial, where Stein is senior managing director.

Stein said there was no "light bulb" moment when he knew Stasch was management material. Rather, he said, she just made herself indispensable.

"Slowly, my mail was reduced," said Stein, still a friend. "Julie was taking care of things."

She also went out on a limb, without giving Stein advance warning, when she promised city zoning officials in the early 1980s that the company would commit to substantial involvement of minority- and women-owned contractors in the construction of the AT&T Corporate Center on West Monroe Street.

That project was a breakthrough, opening up major downtown projects to minority- and women-owned contractors in an unprecedented way, said contractor Larry Huggins, whose firm worked on the skyscraper.

"I was basically a painting contractor at the time ... and now I'm one of the largest African-American general contractors in Chicago," said Huggins, president of Riteway-Huggins Construction Services Inc. "When the book is written about minority contractors, Julie's name should be at the top."

Returning to public service

As Stasch's track record on affirmative action gained national attention, the Clinton administration hired her as the No. 2 official at the General Services Administration, which oversees government real estate.

She recalls the days after the 1995 bombing of the Alfred P. Murrah Federal Building in Oklahoma City as "a very, very scary time," with copycat bomb threats setting off wave after wave of building evacuations. She participated in White House Situation Room meetings, working with the Justice Department and others to "harden" security at courthouses and other federal buildings.

After a relatively short return to the private sector, first back to Stein & Co. and then taking the chief executive's post at community development-oriented Shorebank Chicago Cos., Mayor Richard M. Daley asked her to head Chicago's Department of Housing, where she developed a well-regarded affordable housing program.

City housing and economic development Commissioner Andrew Mooney, who at the time was leading a neighborhood redevelopment agency, sees Stasch as a fountain of ideas. He recalled an interaction during a Community Development Commission meeting while she was housing chief.

"She leaned over to me ... and said, 'Is there a way we can starting using (tax increment financing) funds to help with housing?' " he said. "TIF had not really been used prior to that for housing, and while we were sitting there, whispering in the meeting, we actually worked out a program."

Daley elevated her to chief of staff in April 1999, making her the eighth person in that post since his election in 1989 and the first woman.

It was to be the most contentious period of her professional life.

She handled the politically treacherous task of revamping purchasing procedures after Tribune disclosures about contract irregularities. And she was a key player in negotiations with the federal government to take back control of the Chicago Housing Authority and to win a $1.5 billion commitment to overhaul public housing. The revamp, which came to be known as the Plan for Transformation, involved tearing down the crime-ridden high-rises and replacing them with mixed-income housing.

Along the way, she tangled with some Daley loyalists, who criticized her for being needlessly abrasive. To her way of thinking, the tension stemmed mainly from fears that her bold approach on public housing could come back to hurt the mayor politically.

"They felt protective of him," she said.

In November 2000, she resigned. "It was time to leave," she said during a recent interview.

Nonetheless, "I have to say it was one of the best times in my career," Stash said as the afternoon light faded outside her windows. "In the private sector and philanthropy, you try to influence the levers of power. In the public sector, you have your hands on the levers."

Setting agenda for change

As head of U.S. grant-making, one of MacArthur's four major programs, Stasch still wields a good deal of influence. She oversaw about $100 million in grants and loans last year in such areas as community and economic development, the preservation of affordable rental housing, juvenile justice reform and digital-oriented education. About 20 percent of the foundation's grants go to Chicago organizations.

And again, she is sticking her neck out, leading the foundation's push into digital education initiatives, in which it has invested more than $90 million in recent years. Of all the foundation's programs, this exploration of how online communication tools can be used transform school programs has the greatest potential for successful systemic change -- and the greatest risk of failure, Gallucci said.

"We don't know the outcome. It's still a risk," he said. "But I tell you, with Julie taking the risk, making the investment, showing good management, I am nothing but impressed so far."

Stasch also is working with the CHA to revise its Plan for Transformation, whose progress was slowed by the housing market collapse.

"I value her judgment and her instincts," Mayor Rahm Emanuel said in a prepared statement.

In another arena, she is one of 14 individuals corralled by World Business Chicago, the city's not-for-profit economic development arm, to devise an economic growth plan for the city and region. The panel's recommendations are due to be released shortly.

"I call her for advice on many things, from the mundane to the truly important," said Michael Sacks, vice chairman of World Business Chicago and chief executive of Grosvenor Capital Management L.P., one of the city's major hedge fund firms.

When told of the compliment, Stasch laughed. "Oh, my God," she said. "From that incredibly wealthy man who sits with Rahm on the sidelines of the Bulls games? Oh, my God.' "

Her modesty is genuine, say some of those who have worked closely with her. "She's very humble and low-key," said Terry Mazany, head of the Chicago Community Trust. "She does not look for the spotlight."

Over the years she declined numerous suggestions that she run for political office.

"The prospect of begging people for money was too distasteful, too daunting," she said. "I would've liked the public policy side of it and the negotiation side of it, but what it takes to get there didn't appeal to me at all."

What does excite her is exploring potential new territory for the foundation, in this case whether there is an effective way for the organization to address prison overpopulation and the ravaging effects that the nation's high levels of incarceration can have on communities and families.

"I'm fearful that in 20 years or 30 years, American society is going to turn around and look at this era, and say, 'What were we thinking?' " Stasch said. "When you're so diminishing the future contribution of a huge proportion of our population, undermining their ability to get a job or care for a family, thus undermining their productivity and undermining us as a productive society ... what were we thinking?"

Gaining confidence: "My mom always told me I was the smartest and the prettiest, and by the time I realized it wasn't true, I already had the confidence, so it didn't matter."

Attending an East Coast boarding school: "I so rebelled against the sort of Eastern snobbiness of it all. I mean, there were probably three girls from the Midwest, and we were all gauche ... so, I only applied to one college, Antioch College, the most hippie school. I always kind of wanted to do the contrary thing."

Management style: "I've never been interested in hiring someone who says, 'Give me my task, I'll check in with you quarterly. That degree of autonomy is not really welcome in my shop. But the counterpoint to that is not micromanagement. The counterpoint, to me, is someone who is willing to put their ideas in the middle of the room ... for everyone to poke at, to challenge, to say, ' What the hell do you mean?' "

Leisure time: "I almost never think of myself as 'off.' Learning, sort of any time, anywhere, is a big pleasure to me. Meeting people, reading things that relate to the things I'm thinking about, I think is very rewarding. That doesn't mean I don't ski, that doesn't mean I won't read a novel with no purpose, it doesn't mean I don't have friends and engage in all those things. But I don't divide my life between on and off."

Favorite objects in her office: A figurine of Sojourner Truth, received in 1991 from the YMCA of Chicago when it gave her its first racial justice award, and a painting of geese flying over a wide-open waterfront, waves lapping against a sandy, reed-studded shoreline. "I can look at the picture and put my mind into a calm space."